This morning Zoho, known for SMB focused SaaS offerings in the areas of productivity, collaboration, business processes launched an Accounting app: Zoho Books. I typically don’t do detailed product reviews, when I see the first good ones, will link to them – just a few points here and then let’s discuss how it rounds out Zoho’s overall strategy.

The following video introduction is a bit “cutesy”:

-and that’s quite intentional. In fact simplicity is one of the key points in Zoho Books:

Clear, streamlined UI, tabs, easy terminology –i.e. Money In, Money Out. This service is clearly targeted at non-accountants, which is most of us in a small business – hey, even I can understand most of it.

That said, Books offers the opportunity to share data and collaborate with accountants (Ouch, did I really needed that reminder for tax time?;-) )

Multi-currency support – this is typically a later add-on in many systems, but Zoho has a wide international presence with most of their other services

Integration with Zoho CRM, Invoice, Mail – somewhat basic now, will be improved as we’ve seen with the rest of Zoho’s offerings

Support for electronic payment systems like Paypal, Google Checkout, Authorize.net. This is a “hidden treasure” inherited from twin service Zoho Invoice, which is a subset of Book’s functionality and can be easily upgraded. Why hidden? Because relatively few know that Paypal offers 50 cent (yes, that’s $0.50 per transaction) Business Payments NOT available through the Web, only via their API, i.e. apps like Zoho Invoice and Boooks.

CloudAve readers know I am a fan of edgy marketing. Now it’s time to update my recently compiled inventory of software marketing pranks. A major show like Salesforce.com’s DreamForce would not even be real without some guerilla marketing activity – except the players seemed to have traded places this year. Guerilla Marketing is normally David’s weapon, but this year Goliath – Holy Microsoft – came down to us earthlings running around on Segways handing out MS Dynamics CRM discount coupons:

In the 90’s I used to laugh at friends who all used Yahoo! as their personal email service. I did not understand how anyone could put up with the slow speeds of web-mail, and tried to convince them to install a decent email client, like Outlook, which is what most of them used in their corporate jobs.

Then things changed: Outlook grew into a bloated monster, it brought otherwise fairly speedy computers to a grinding halt and finding stuff in the archives of years of email became a gargantuan job. A new web-based email service came to rescue: Gmail was fast, well-organized, included productivity-boosters like labels and conversation-threading, and most importantly, you could not only search but also find old email in seconds! For this former Outlook-fan the switch was a no-brainer – in fact I ended up ditching almost all desktop software, moving online. (Gmail for mail and Zoho for most other tasks).

Life was good, I stayed productive and Gmail grew into a suite of productivity services by Google. Too bad it’s breaking down – again…

This isn’t accurate. We have not raised prices. Our prices have been steady for years. Max is still $149. Premium is still $99. Plus is still $49. Basic is still $24. Free is still free. Same prices as last week, last month, last quarter, last year, two years before that, etc. Each plan has the exact same levels and features and projects and disk space as before.

I’ve been long-time Gmail fan, having used it from the very early days, for almost 5 years now. The key reasons why I switched and have stuck with the service ever since were the productivity boosters, first of all:

Threaded conversations

Labels

Search

Google did to email what all new product teams should: throw away all known concepts, start from fresh, figure our what the system should really do, instead of delivering a customary system with minor improvements. Instant success. Instant Customers. No, correct that: instant users. There is a difference. Apparently not everyone likes “radically new”.

It was 2006, the first Office 2.0 Conference in San Francisco and I just met Jeffrey Walker, President of Atlassian. I had followed the company for a while (OK, I admit, had been a fan), met Mike, but this was the first time with Jeffrey, so we took our box lunch to a cozy little place away from the crowd and started to chat. Within minutes a VC Partner joined us, and so the usual “what are you doing” conversation started. Well, it wasn’t a conversation: Jeffrey talked, the VC listened. And in 5 minutes he was ready pull out the checkbook (sort of), when Jeffrey dropped the bomb:

Seeing the VC’s face was priceless. After all, the cliche for startup success was to take funding. Which Atlassian did – 4 years later. But they do nothing by halves. $60 million or nothing! 🙂 But I am running ahead. Back to the early days.

I got to know Atlassian as the Wiki Company – having compared the few early business wikis, I came to the Conclusion that Confluence was the most robust, complete one. I’m probably not the most pleasant reviewer when I don’t like what I see – but I could simply not find anything to criticize with Confluence – it became the de facto industry standard for others to follow. That said Atlassian is /was about more then Confluence: their roots are in supporting developers, having started with a powerful bug tracker Jira, and growing to eight (?) products organically and through acquisitions. Not being a techie, I don’t even understand most of these products – so the root cause of my infatuation with Atlassian was really their business model.

There is nothing wrong with taking VC Funding, but risking everything to your last penny is what Entrepreneurship was originally all about, so it is simply refreshing to see a company to have made it solely on bootstrapping, beating the odds. Add to it great software that’s easy to buy, learn, use, sprinkle it with a good dose of transparency and great service, and you get a startup worth admiring. I’ve had lots of fun covering their early success and also learned a lot watching them:

And today they taught me another lesson: don’t ever sit on a story. It expires. My unwritten story that I’ve been contemplating for a while was about two bootstrapped startups, both in software, amazingly successful that have sailed into IPO zone almost unnoticed. The second one is Zoho, which I consider to be approaching IPO-readiness, but I seriously doubt they would chose to go that way. But Zoho is our Sponsor, talking too much about them would look like ***ing up, so I’ll stop here. The day will come. But today is Atlassian’s day.

Why would a company that has profitably grown for 8 years need funding now? They want to grow more agressively, both in terms of geography and product coverage. That means acquisitions. They want to accelerate growth to above $100M revenue, which is what’s considered “IPO ready” nowadays.

But what drove me to the conclusion they were on the IPO-track even before the funding was deep in their culture.

Atlassian is always hiring, yet it’s difficult to get in. They are picky. It’s a “work-hard-play-hard” culture. Employees are well paid and the company spends lavishly on team fun. No wonder their revenue per employee ratio is high. But the team lives in Sydney and San Francisco, where there is an expectation that after a few years in a red-hot startup you get rich… The Founders probably no longer live frugally, but how to share the wealth with all employees without an exit? Funding accelerates the path to exit and my even bring interim liquidity critical to keep the team around. I agree with Ben in that respect.

$60 million is a lot of money, in fact Accel Partners claim it is the largest investment they’ve ever made in the software business. But there’s a whole world of difference in picking it up as a mature, profitable company or a fledgling startup. Some of Atlassian’s competitors picked up a third of this amount at early stages and probably had to give up three times as much equity as Atlassian did. Bootstrapping has paid off, after all.

When your server goes down, it’s bad enough –even worse if you have to keep on trying to reach support in vain, then if you finally get through, you’ll have to convince them there’s trouble. If you have such a host, run! (and I can even tell you where to). So whenever I ran into trouble with online services, I feel relieved to see the auto-email saying support got notified. At least they know!

But what if you know when your server will fail before it actually happens? I’ve just had an accidental peek into as-yet-unreleased technology: today’s Zoho Blog post about Customer Support Community linked to another post, which simply did not load. Oops – the URL was in error, it pointed to an internal site, something like predict.zohocorp.longmumbojumbo.etc. I got excited: can they predict future lottery numbers? The World Cup results? (referee errors aside…)

I quickly asked Zoho what it was all about: it’s their predictive monitoring technology, which crunches a lot of data, is already delivering lightning fast notifications of failures after the fact, and also predictions – for now with false positives. They certainly have to keep on tuning the technology, but it’s reassuring they are working on it.

I’ve been long-time Gmail fan, having used it from the very early days, for almost 5 years now. The key reasons why I switched and have stuck with the service ever since were the productivity boosters, first of all:

Threaded conversations

Labels

Search

I also must say that for all other Web Office needs I prefer ( and always have) Zoho’s products. Now, take that with a grain of salt, I do have a bias, since Zoho are is the exclusive Sponsor of CloudAve, my main blogging gig, and before launching CloudAve, I had been a long-time Zoho Advisor. Being an Advisor is a controversial role: sometimes your Clients listen, sometimes they don’t.

I must admit for a long time I was going nuts trying to convince Zoho to throw out most of their email product and radically revamp it to offer Gmail-like benefits, mostly threaded conversations. Why didn’t they get it? I was frustrated. But the two things happened. I looked at the email (both Zoho and Gmail ) accounts of several people and was surprised that even the Gmail version showed only 1-2-3 items in a thread. My folderslabels are full of threads with 30+ entries each. I’m a productivity-maniac freelancer, part of a few hyper-active discussion group, but not everyone’s usage pattern is like mine…

In fact I also had to realize that I don’t really represent Zoho’s paying customer base. Sure, freelancers, bloggers..etc can generate a lot of hype and get enthusiastic about change, but the real money is in those “boring” businesses that are willing to pay, but don’t really want to change. Corporate employees live in Outlook, whether they like it or not is almost irrelevant, they (or their employers) resent change. So Zoho decidedly resisted turning everything upside down, staying “boring” for a long while, because this is what customers told them to do. (Zoho has this strange philosophy about business: they don’t want to be coolest company. Just a profitable one.)

Of course over time they added conversation threads and labels, albeit implemented less radically than Gmail – it’s a mix, you can have either traditional or conversation views, and both labels and folders. But this story is not about Zoho – it’s about Gmail. Funny changes are happening in Gmail-land. They added folders, then improved them. Not that it makes a lot of difference – while for some it is a religious war, I’ve always said:

OMG! Is that the End of the World, or what? Not really… I suppose it’s all about financial realities and what the real world wants: you can be innovator, but if you want to sell, you better listen to your customers. (For clarification: customers are those who pay. That’s not me ). Welcome back to Earth, Gmail! I for one am happy the “new” old way is just an option and conversations remain, otherwise I’d have to switch again – and switching is a major pain.